BJ's Wholesale Club Holdings, Inc. (BJ)·Q4 2025 Earnings Summary

Executive Summary

• Q4 FY2024 (reported March 6, 2025) delivered solid comps and traffic, with comparable club sales ex-gas up 4.6% and digital comps up 26%; adjusted EPS was $0.93, above the company’s prior Q4 guidance range of $0.78–$0.88, aided by strong membership fee income growth (+7.9% YoY) and resilient traffic .
• Merchandise gross margin rate decreased ~10 bps YoY on mix and investments (e.g., eggs), and fuel profit per gallon normalized from elevated levels last year; net sales were $5.162B and total revenues $5.279B .
• FY2025 guidance introduced: comps ex-gas +2.0% to +3.5%, adjusted EPS $4.10–$4.30, capex ~$800M; management flagged slight SG&A deleverage from accelerated club openings, reinvestment of fee increase into wages and free same‑day delivery, and ~27% tax rate; tariffs not contemplated in assumptions .
• Expansion remains a key catalyst with plans to open 25–30 clubs over the next two fiscal years and a new highly automated ambient DC (~$200M over two years); entry into Texas (DFW) planned for 2026, supporting long-term share gains in the club channel .

What Went Well and What Went Wrong

What Went Well

• Strong traffic and comps: 12th consecutive quarter of traffic growth; Q4 comps ex-gas +4.6% with traffic contributing >3pp; digital comps +26% YoY and +53% on a two-year stack .
• Membership strength: ~90% tenured renewal rate; membership fee income up 7.9% to ~$117M; higher-tier penetration near 40% with added Plus benefits (two free same-day deliveries annually) .
• GM momentum and holiday execution: General merchandise and services grew >5% comps; toys low double-digit; consumer electronics high single-digit despite sector softness; “Fresh 2.0” drove double-digit produce comps for three consecutive quarters .

Selected quote:

• “We consistently drove robust traffic and market share gains both in our clubs and at our gas pumps.” — Bob Eddy, CEO .
• “Digitally enabled comp sales grew by 26% year-over-year, contributing significantly to our overall growth.” — Laura Felice, CFO .

What Went Wrong

• Margin pressure: Merchandise gross margin rate declined ~10 bps YoY on mix (outsized egg cost impact) and value investments; gross profit down to $949.0M vs $963.3M prior year (53rd week in prior year amplified the comparison) .
• Fuel normalization: Profit per gallon normalized vs last year’s higher levels, reducing YoY gasoline profits despite 3% comp gallon growth .
• SG&A increase: Q4 SG&A rose to ~$758.2M on new unit growth, incentive comp, and higher depreciation from owned clubs; company expects slight SG&A deleverage in FY2025 on accelerated openings .

Financial Results

Quarterly fundamentals vs prior periods

Q4 FY2024 vs prior year and prior quarter; vs estimates

Note: Company’s own guidance for Q4 FY2024 adjusted EPS ($0.78–$0.88) was exceeded by actual adjusted EPS of $0.93 .

KPIs (Q4 FY2024)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Membership is at an all-time high, above 7.5 million members, with another impressive renewal rate performance of 90%...Higher-tier membership penetration is now nearly 40%.” — Bob Eddy, CEO .
• “Digitally enabled comp sales for the fourth quarter grew 26% year-over-year...Over 90% of our digital sales are fulfilled by our clubs.” — Laura Felice, CFO .
• “Our efforts have boosted our credibility in fresh, exhibited by our double-digit produce comps in each of the past 3 quarters.” — Bob Eddy, CEO .
• “We expect to open 25 to 30 clubs across the next 2 fiscal years...clubs opened since 2020 contributing to comp sales at a rate of over 2x the chain.” — Bob Eddy, CEO .
• “We are planning for an effective tax rate of approximately 27% for the year...we expect capital expenditures of approximately $800 million.” — Laura Felice, CFO .

Q&A Highlights

• Comps cadence and outlook: Q4 comps were strong throughout the quarter; January was the strongest month. Early Q1 traffic momentum continued, with some sensitivity in discretionary purchases; first half expected to be stronger than second half .
• Tariffs risk: Management expects tariffs to raise prices and potentially disrupt supply chains but cited lower relative China exposure (few % of business) and strong procurement capabilities; value proposition tends to attract consumers in inflationary periods .
• Digital drivers: Convenience-led adoption of BOPIC, curbside, ExpressPay, same-day delivery; rebuilt app search and aisle‑locator features; 90% of digital fulfilled through clubs, supporting structural margin advantages .
• New club productivity: New clubs performing above plan (top and bottom line), contributing comps at 2–3x the chain; team optimizing ramp to mature run-rate; considering sale‑leaseback options to manage owned real estate base .
• Fresh 2.0 impact: Produce-led traffic and basket expansion, with intent to broaden fresh excellence to meat, bakery, and dairy; best members interact across fresh categories, driving higher renewal and spend .

Estimates Context

• S&P Global consensus EPS and revenue estimates for Q4 FY2024 were unavailable due to SPGI rate limits at time of retrieval; we cannot provide a formal beats/misses comparison.
• However, relative to company guidance, BJ delivered a significant beat: adjusted EPS printed $0.93 versus prior Q4 guidance of $0.78–$0.88, supported by robust traffic, membership fee income growth, and digital engagement .

Key Takeaways for Investors

• Traffic-driven comp strength, digital adoption, and Fresh 2.0 are structurally increasing trip frequency and basket size, supporting medium-term comps even amid discretionary softness .
• Margin mix pressures (eggs, fresh investments) and fuel normalization weighed modestly on Q4 rate; FY2025 SG&A deleverage expected from accelerated openings and reinvestment of fee increase, partially offset by membership and own-brand strategies .
• Expansion is the core growth catalyst: 25–30 clubs over two fiscal years plus Ohio DC and DFW entry in 2026 should compound share gains; management has flexibility via owned real estate and potential sale‑leasebacks .
• Strong balance sheet and 0.5x net leverage underpin capital deployment for growth and buybacks (new $1B authorization), enhancing long-term equity compounding potential .
• FY2025 guide (comps +2.0–3.5%, adj. EPS $4.10–$4.30) reflects cautious macro (tariffs not contemplated) but confidence in controllables (membership, merchandising, digital); monitor tariff developments and discretionary demand signals into 2H .
• Near-term trading: Positive read-through from Q4 beat vs company guidance and healthy traffic; watch for margin cadence, SG&A ramp from openings, and any tariff headlines as potential volatility drivers .